The Plot to Take America Hostage

America and the world are breathing a collective sign of relief now that the United States has narrowly averted what could have become a cataclysmic financial catastrophe. The very day that the government was due to run out of money, the US Senate passed a bill to raise the debt ceiling. By late evening the deeply divided House of Representatives had passed the bill as well, and President Obama signed it into law shortly after midnight.

If America had defaulted on its debt obligations US credit ratings would have tumbled, interest rates would have soared, the US dollar would have fallen, banking credit would have frozen up, banks would have refused to issue new loans, businesses would have cut expansion and laid off workers, homeowners would have seen their mortgage rates soar, and consumer purchases would have dropped off drastically. In short, both the American and global economies would have been thrown into a severe depression exceeding even that of the 2008 financial meltdown.

Now that the crisis has been averted, it is possible to look back and piece together the sequence of events that that led up to this near disaster. It began when Congress was unable to pass a necessary Continuing Resolution [CR] to authorize expenditures for the new fiscal year. With no approved discretionary funding, all non-essential government services were forced to shut down on October 1.

Both houses of Congress worked to promote their own versions of a CR to keep the government functioning. But as I reported in an earlier blog, it soon became obvious that the government shutdown was not really about funding the government. It was solely about the funding of the Affordable Care Act (often referred to as “Obamacare). As stated in that blog,

The facts speak for themselves: Before the shutdown, the House passed a CR to fund government operations and attached an amendment to defund Obamacare. Then the Senate stripped off the defunding provision and passed the CR without any further changes. The House submitted the same CR to the Senate with an amendment to delay Obamacare for a year. Again the Senate stripped off the amendment and passed the straight CR. Both Houses have passed the identical CR twice; they only disagree about Obamacare.

This legislative stand-off continued for another two weeks until a much larger issue came to the fore: the debt ceiling. The United States has an odd funding arrangement in which Congress must first approve expenditures for the coming year (pass a budget or, failing that, a Continuing Resolution to continue making appropriations). Then later it must pass a second resolution enabling the government to actually pay for the bills that have been incurred. This becomes important if the government is running a deficit, and paying its bills in full would add to the national debt.

Historically, this second vote has been a straight housekeeping measure. But in recent years it has become a political weapon used by opposition parties to try and force the government to accept new policy changes in return for the authority to pay its bills.

The past week Republicans in both houses of Congress tried to use the debt ceiling as a weapon to force the President to drop Obamacare. The President replied that he was not going to negotiate with “hostage takers,” and that Congress had a responsibility to pay for the bills it had already incurred.

If Congress wanted to debate new funding measures, the President was open to that. But the Affordable Care Act was the law, passed by an act of Congress in 2010, upheld by the Supreme Court, and fought over in the 2012 presidential election – receiving the broadest referendum possible. The Republicans has lost that election. The President received a sizeable majority, and the signature piece of legislation from his first term of office – the Affordable Care Act – was thereby reaffirmed.

But a strongly organized opposition refused to concede the issue. Led by Tea Party Republicans in both the House and Senate, they took the country to the brink of default in insisting that Obamacare be sacrificed in exchange for America remaining financially solvent.

Polls showed public opinion solidly turning against the Republicans over this maneuver. Seasoned Republicans in the Senate, fearful of their own ability to be re-elected, opened last-minute negotiations with Democrats to resolve the issue. They put together a bi-partisan proposal that was passed on the morning of the final day that the government remained solvent. The bill had more difficulty getting through the House with its Republican majority, but late in the evening it too was passed. The Senate vote was 81-18 in favor, while the House vote was 285-144.

Those Behind the Plot

Most of the media coverage of this crisis focused on the members of Congress and their actions. But behind the scenes there were other actors orchestrating the drama as it unfolded. As The New York Timesreported in a major article on October 5, the federal budget crisis was many months in the planning.

Shortly after President Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in the capital to plot strategy. …

Out of that session, held one morning in a location the members insist on keeping secret, came a little-noticed “blueprint to defunding Obamacare” signed by Mr. Meese and leaders of more than three dozen conservative groups.

It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles: that Republicans could derail the health care overhaul if conservative lawmakers were willing to push fellow Republicans — including their cautious leaders — into cutting off financing for the entire federal government.

The Tea Party Patriots, Americans for Prosperity, FreedomWorks, the Club for Growth, and Heritage Action for America all aggressively got behind the effort to defund the Affordable Care Act. The Times article also reports that

The billionaire Koch brothers, Charles and David, have been deeply involved with financing the overall effort. A group linked to the Kochs, Freedom Partners Chamber of Commerce, disbursed more than $200 million last year to nonprofit organizations involved in the fight.

The Bill Moyers website contains an interactive page profiling 10 of the main actors operating behind the scenes in this effort to nullify the Affordable Care Act as well as 9 of their willing agents (and one target) in Congress. It is well worth a visit.

Members of Congress were faced with a highly orchestrated campaign led by powerful political back-room figures and financed to the tune of hundreds of millions of dollars to overturn the Affordable Care Act. Their tactics were aggressive. Their influence was extensive. And their pressure tactics were powerful.

More importantly, their ambition was seemingly without bounds – even to the point of taking America to the brink of economic collapse in pursuit of their single-minded goal.

When such powerful people seek to manipulate Congress, control its legislature, overturn its laws, and impose their will on the country, we are in a very dangerous situation. This orchestrated effort comes very close to amounting to an attempted coup. And if America had defaulted on its debts due to their influence, they would arguably have been guilty of no less a crime than treason.

Democracy is a fragile thing. Perpetual vigilance is required to defend it. Otherwise, powerful interests will not hesitate to subvert it, manipulate it, and control it to suit their own purposes.

America averted a catastrophe at the very last moment this past week. But it must not let down its guard. It must remain vigilant against all those who threaten it – especially those who threaten it from within.

About politspectatorEdward Clayton grew up in the US but has lived in Canada for the last 4 decades. He is a long time peace activist and committed to issues of social justice and good government. He reports on Canadian, American, and global politics from a Canadian perspective.

Edward Clayton grew up in the US but has lived in Canada for the last 4 decades. He is a long time peace activist and committed to issues of social justice and good government. He reports on Canadian, American, and global politics from a Canadian perspective.